When you have an excess contribution in your Roth IRA, the penalty is 6% of the lesser of the amount of the excess or the total 2016 year-end balance in all of your Roth IRAs. TurboTax therefore requires that you enter the year-end balance on line A of the Roth IRA Value Smart Worksheet.
Normally you would do this in step-by-step mode by clicking the Continue button on the Your 1099-R Entries page and proceeding through all of the follow-up, including indicating that you will not be requesting a return of excess contribution and then entering your total year-end balance you have in your own in Roth IRAs. You can also do this in forms mode or during the Smart Check by making the entry directly on line A of the Roth IRA Value Smart Worksheet that is part of TurboTax's 5329 form.
Note that paying the 6% only takes care of the penalty for 2016. You'll still have a 6% penalty for this excess for each subsequent year that the excess remains. You'll be able to eliminate the excess in a subsequent year by either applying it as an eligible contribution for that subsequent year or by making a regular Roth IRA distribution of the amount of the excess (not to include any earnings attributable to the excess) in that subsequent year.
